Understanding the San Diego FHA Streamline Refinance Program

San Diego FHA Loans

On June 11, 2012 the Federal Housing Authority instituted a new policy designed to help homeowners refinance their homes through its San Diego FHA Streamline Refinance program.

The new policy is designed to help qualified homeowners lower their interest rate and payments to historically low levels without the added burden of having to pay another high up-front mortgage insurance premium (MIP).  The Upfront Mortgage Insurance Premium on this program has been decreased down to just .01%.

As a San Diego mortgage broker, I am excited to help homeowners take advantage of these very enticing changes in the San Diego FHA Streamline Refinance Program.

Prior to June 11, the up-front MIP was pegged at 1.75% of the refinanced loan amount. With the new up-front MIP reduced, many homeowners with FHA financing stand to save thousands in refinance costs.  The annual mortgage insurance premium has also been reduced to .55% from 1.25%.

In order to qualify for the San Diego FHA Streamline Refinance program, you must:

1.       Be current on your FHA mortgage and have made at least 6 payments.
2.       Have made on time payments on your present mortgage for at least the past 12 months.
3.       Have had your current FHA mortgage endorsed by HUD prior to June 1, 2009.

In addition, the new mortgage must lower monthly payments by at least 5%.  There are no income or credit score requirements set by FHA to qualify for this new Streamline program, but most lenders will require a minimum credit score.

Although an appraisal is not required, the terms of the mortgage may be more stringent without one.  If you have any questions about whether you are better off getting an appraisal or not, please contact The Mortgage Planners, your local San Diego mortgage broker.

The June 1, 2009 date was chosen to allow maturation of FHA loans.  Because most borrowers default within the first three years, FHA chose to aid borrowers who have remained in good standing for at least three years.

The San Diego FHA Streamline Refinance Program and How to Determine the Endorsement Date

San Diego residents who wish to qualify for a San Diego FHA Streamline Refinance program should carefully check their endorsement date for their current FHA mortgage.  The FHA endorsement date is not the closing date on the loan but rather the date when the Federal Housing Authority reviewed your loan and approved it.  The FHA insures those loans against default and the endorsement date marks the point when the FHA endorsed your loan to be insured.

In most cases, loan documents are sent to the FHA to be endorsed within 60 days of closing.

If you are having difficulty determining when your FHA mortgage was endorsed, you may wish to contact the FHA at 800-697-6967.  You should have your FHA Case Number, which is a 10 to 13 digit number that can be found on your closing documents.  It will also be found on your HUD 92900-A form.

A  San Diego FHA Streamline Refinance Can Save Borrowers Thousands in Yearly Costs

Many larger lending institutions are unwilling to accept refinance applications from new borrowers, and have opted to only refinance existing customers.  This is not the case with The Mortgage Planners.

As San Diego Mortgage Brokers, we are not limited to helping only past clients.  We can assist any borrower who is looking to obtain a FHA Streamline refinance.  Our rates and fees are also much more competitive than large banks, making it an easy decision who to work with.

In some cases, a San Diego FHA Streamline Refinance may result in a refund of previous FHA Upfront MI charges.  The refund applies only to FHA backed mortgages issued after December 9, 2004 and that were refinanced within three years into another FHA backed loan.

Although no amount will be returned to the borrower in cash, the amount of the Up-Front MI from the original mortgage loan that was overestimated can be applied as credit to the new, refinanced mortgage’s Up-Front MIP.

San Diego homeowners who had their mortgages endorsed following May 31, 2009 should as still look into refinancing with a San Diego FHA Streamline.  Although the MI rates may not be as low for these homeowners, current San Diego interest rates on 15 and 30 year mortgages are so low that most homeowners would stand to save thousands over the life of the new loan.

If you utilize a San Diego FHA Streamline Refinance on a loan endorsed after May 31, 2009, your annual FHA MI will be 1.25% of the loan amount, if the 30 year loan has a loan-to-value over 95%.  If the loan-to-value amount is below 95%, then the annual MI rate will be 1.20% of the loan. If your loan is over $625,500 and you reside in a FHA High Cost Area, which San Diego is, then you may be required to add an additional .25% to your annual PMI rate.

If you live in the San Diego Area  and are interested in learning more about an FHA Streamline Refinance and how much it may be able to save you, please give me a call at 619-312-0612 or apply for a FREE interest rate quote, HERE.

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